Health Care, GOP Style

HEALTH care reform will probably happen under the Clinton administration after all, but not as conceived by the president three years ago. Comprehensive reform has given way to budget-driven reform, and the concern now is whether this approach will maintain fairness as it imposes discipline on government programs.

Chief among those programs is Medicare, a health-care entitlement for the country's older citizens. The House Republicans would lop $250 billion off Medicare growth over the next seven years. Their Senate colleagues trim somewhat less, but both plans represent a sharp reversal of current trends. The president's budget plan cuts considerably less - $124 billion - but nonetheless reflects a recognition that the program has to be reined in.

The means of taming Medicare include greater emphasis on health maintenance organizations, the use of vouchers, and higher premiums for wealthier recipients. If these are applied with an eye to individual needs and ability to pay, fairness should be attainable. Many seniors themselves recognize that a balanced budget, as well as a healthy Medicare trust fund, demand sacrifice - and that all Americans have to share in it.

As for Medicaid, which serves the poor, the cuts are easier politically but harder ethically. This program reaches some 37 million, almost half children. Many elderly nursing home residents also depend on Medicaid.

The GOP approach here is block grants to the states, with a cap on how much the federal government would chip in. Minus Washington's guiding role, will the states do right by their poorer citizens?

Questions of supply and demand permeate the health care debate. How bloated and inefficient is the nation's network of hospitals? Given new incentives and options, what choices will the public, particularly the elderly, make?

Together, Medicare and Medicaid account for one-third of US health care spending. Cinching their budgets will cause the whole industry to take a deep breath and rethink its practices. There won't be a guiding hand from Washington, but there probably won't be the governmental intrusiveness that many saw in earlier "comprehensive" reform proposals either.

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